I know! Too many articles. But *so much* is happening. If you are struggling, imagine me. Ten articles in two days. I need a vacation in the Seychelles or someplace with a beach. No Internet. No Blackberry. Just sand and sun. And me zonked out on a towel under an umbrella. Hand me a beer or a soda, please, when I open my eyes. Otherwise, my do not disturb sign is on.

Kidding. Or daydreaming. But this is important. The Computer & Communications Industry Association has filed a Complaint [PDF] -- "Matter of Misrepresentation of Consumer Fair Use and Related Rights" -- charging content owners including Universal, NBC Universal, the National Football League, Major League Baseball, Dreamworks Studios, and others, with misrepresenting copyright law in their "copyright warnings".

It's about time somebody noticed US Copyright Law includes fair use. Everyone in the entertainment industry that waxes poetic about the most holiness of copyright law seems to forget that the law includes a section limiting exclusive rights, the fair use provision. Yoo hoo. DRM fans. You probably want to pay attention.

In honor of this occasion, I'll mention that I've just put a Fair Use section on Groklaw's permanent Legal Research page in the Terms & Concepts section, so you can find resources explaining what fair use is, starting with the law itself. The finest explanation I've ever seen is the very funny comic book Bound by Law, by three law professors, James Boyle, Keith Aoki, and Jennifer Jenkins, explaining copyright law, including fair use. It's fun, but it's also accurate and quite serious about making the law clear to nonlawyers.

So, an historic moment. In fact, speaking of beaches, this is what it looks like when the legal tide begins to turn.

***********************************

Before the
Federal Trade Commission
Washington, D.C.

In the Matter of

Misrepresentation of Consumer Fair Use and
Related Rights

by

National Football League, NFL Properties,
Inc., NFL Enteprises LLC

and

Major League Baseball, Major League
Baseball Properties, Inc., Major League
Baseball Advanced Media, LP

REQUEST FOR INVESTIGATION AND
COMPLAINT FOR INJUNCTIVE AND OTHER RELIEF

1. This complaint concerns the systematic misrepresentation of consumers' rights to use legally
acquired content by certain copyright-holding corporations. These corporations have
engaged, and continue to engage in, a nationwide pattern of unfair and deceptive trade
practices by misrepresenting consumer rights under copyright law, and in some cases
threatening criminal and civil penalties against consumers who choose to exercise statutorily
or Constitutionally guaranteed rights. These false representations violate the letter and spirit
of the Federal Trade Commission Act's prohibition against unfair or deceptive acts or
practices in or affecting commerce.

2. As described further herein, pursuant to 16 C.F.R. § 2.2(a) the Computer & Communications
Industry Association requests that the Federal Trade Commission ("FTC" or "Commission")
investigate these practices and order all relief that it deems appropriate.

1

PARTIES

3. The Computer & Communications Industry Association (CCIA) is an international, nonprofit
association of computer, information, and communications technology firms. CCIA is
dedicated to preserving full, fair and open competition throughout our industry. To that end,
CCIA promotes balanced intellectual property policy that creates incentives for authors and
creators without discouraging innovation, threatening competition, or undermining public
welfare. CCIA members employ more than 600,000 workers and generate annual revenues
in excess of $200 billion.

4. The unfair and deceptive practices alleged herein affect the information and communications
technology industry, including CCIA members, by reducing demand for new and innovative
products and services that involve digital media. Evidence suggests that consumers are
confused about their rights to use legally acquired media and forego the use of legitimate
products and services out of confusion or fear.1The misleading statements by the following
entities contribute to that confusion.

5. The National Football League is an unincorporated association of the collective member
football clubs. The National Football League's intellectual property rights are exploited
through entities including NFL Properties, Inc., a California corporation, and NFL
Enterprises, LLC (collectively, hereinafter "National Football League" or "NFL"). The NFL
does business at 280 Park Avenue, New York, New York, USA.

6. Major League Baseball is an unincorporated association that controls and coordinates the
activities of all organized professional major league baseball clubs in the United States.
Major League Baseball's intellectual property rights are exploited through entities including
Major League Baseball Properties, Inc., and Major League Baseball Advanced Media, L.P.
(collectively, hereinafter "Major League Baseball" or "MLB").2 The MLB does business at
245 Park Avenue, 31st Floor, and 75 Ninth Avenue, New York City, New York, USA.

7. Universal Studios, Inc. produces and distributes to the public film and video entertainment
for theatrical, home entertainment, and television markets and is a wholly owned subsidiary
of NBC Universal, Inc. (collectively, hereinafter "Universal"). Through a unit designated as
Universal Studios Home Entertainment, Universal distributes a library of motion pictures and
television entertainment programs owned by Universal and its subsidiaries, as well as content
acquired from third parties. Universal does business at 100 Universal City Plaza, Universal
City, CA, USA.

8. Morgan Creek Productions, Inc. ("Morgan Creek") is an independent film production
company that manages and coordinates the creation of motion pictures. Morgan Creek

9. DreamWorks Animation SKG, Inc. is a developer and producer of computer-generated
animated feature films for theatrical, home entertainment, and television markets.
DreamWorks Animation represents itself as "producing high-quality family entertainment
through the use of computer-generated (CG) animation." DreamWorks Animation films are
distributed by DreamWorks LLC, (collectively hereinafter, "DreamWorks"), which was
acquired by Paramount, a property of Viacom, Inc., in January 2006. DreamWorks does
business at 1000 Flower Street, Glendale, California, USA.

10. Harcourt Inc. is a publisher of print and electronic materials and represents itself as a global
education company. Harcourt is a member of the Reed Elsevier Group plc, a publisher and
information provider. Harcourt, Inc. does business at 6277 Sea Harbor Drive, Orlando,
Florida, USA.

11. Penguin Group (USA), Inc. is a publisher of fiction and non-fiction print materials. It
represents itself as a leading U.S. adult and children's trade book publisher. Penguin Group
(USA) Inc. is the U.S. affiliate of the Penguin Group; Penguin's parent company is Pearson
plc. Penguin Group (USA), Inc. does business at 345 Hudson Street, New York City, New
York, USA.

12. Each of the entities described in paragraphs 5-11 (hereinafter "Rights-holder Corporations")
constitute "corporations" as that term is defined Section 4 of the Federal Trade Commission
Act, 15 U.S.C. § 44.

13. At all times relevant to the allegations made herein, the acts and practices described
constitute "commerce" as that term is defined in the Federal Trade Commission Act, 15
U.S.C. § 44.

FACTUAL ALLEGATIONS

14. The named Rights-holder Corporations are engaged in the production, sale, delivery, or
distribution of various forms of media entertainment to the public. This media entertainment
is sold to nationwide audiences in multi-million dollar markets.

16. Copyright warnings are express statements and representations, either visual or auditory in nature, which describe and purport to limit permissible uses of the work in question. These
warnings may make representations regarding civil and criminal penalties for copyright
infringement. These warnings are not required by federal law.

17. Each of the Rights-holder Corporations identified herein has employed, and continues to
employ, copyright warnings that purport to limit the public's right to engage in activities not
explicitly authorized by the Rights-holder Corporation in question. Many of the warnings
threaten consumers with criminal and civil penalties for engaging in "unauthorized" activities
that are in fact permitted by statute or by limitations imposed by the U.S. Constitution itself.

18. These representations materially misrepresent U.S. copyright law, particularly the
fundamental "built-in First Amendment accommodations" which serve to safeguard the
public interest.4

19. Because of the federal nature of copyright law, state enforcement officials are unlikely to
intervene on consumers' behalf in this matter.

Misrepresentations in Televised Sporting Events

20. The National Football League presents to viewers of NFL games unfair and deceptive
auditory copyright notices throughout the course of games broadcasted over television
networks which state the following:

"This telecast is copyrighted by the NFL for the private use of our audience. Any
other use of this telecast or any pictures, descriptions, or accounts of the game
without the NFL's consent is prohibited."

21. This voice-over warning accompanies images of professional athletes and the official NFL
logo in the background, and includes small text in the lower portion of the screen stating,
"Telecast 2007, National Football League, All Rights Reserved". Such segments are usually
presented immediately after a commercial break and prior to the continuance of the
broadcasted game. An example of such a segment was, at the time of filing this complaint,
available on the popular online video sharing website, YouTube.5

22. Major League Baseball also presents to viewers of its sporting events unfair and deceptive
auditory warnings throughout the course of its broadcasts. The following statement is
repeatedly made by the league:

4

"This copyrighted telecast is presented by authority of the Office of the Commissioner of Baseball. It may not be reproduced or retransmitted in any
form, and the accounts and descriptions of this game may not be disseminated,
without express written consent."

23. The voice-over is often accompanied by animated graphics and the official Major League
Baseball logo or other team's logos. Examples of such segments also appear on YouTube at
the time of filing.6

24. The warnings used by the NFL and MLB materially misrepresent federal law, to the
detriment of consumers. Uses of copyrighted works unauthorized by the copyright holder are
not only permitted by federal law, they are actively encouraged by it. Section 107 of the
Copyright Act, for example, encourages the unauthorized use of copyrighted works for
various purposes including criticism, commentary, and news reporting. Under some
circumstances, fair use permits the reproduction of an entire work by consumers.7

25. The claim that news accounts or "descriptions" of the game cannot be "disseminated" is
manifestly false. "No author may copyright facts or ideas."8Copyright serves to promote
the dissemination of information by ensuring that "every idea, theory, and fact in a
copyrighted work becomes instantly available for public exploitation at the moment of
publication."9Yet the leagues purport to prohibit every unauthorized post-game water-cooler
conversation, notwithstanding that a sports league is constitutionally barred from obtaining
any copyright over the facts of the games that it produces.10

Misrepresentations in Motion Picture DVDs

26. Just as viewers of television sporting events are confronted with misrepresentations of their
rights, viewers of motion picture DVDs are also confronted with misleading claims.

27. Morgan Creek and Universal motion pictures are widely distributed on Digital Video Discs
(DVDs) which, when loaded into a DVD playing device, present the viewer with an unfair
and deceptive copyright warning. The physical DVDs and packaging are also labeled with
an unfair and deceptive copyright warning.

28. The warning below is an example of the language that is contained in the closing credits of
motion pictures contained on Morgan Creek and Universal DVDs such as "The Good
Shepherd" (2006), which grossed $69,496,000 in the United States:

5

All material is protected by copyright laws of the United States and all countries throughout the world. All rights reserved. Any unauthorized exhibition,
distribution, or copying of this film or any part thereof (including soundtrack) is
an infringement of the relevant copyright and will subject the infringer to severe
civil and criminal penalties."

(emphasis supplied) See Exhibit A.

29. The above warning is presented at the close of the film and consists of a black background
with white text.

30. Morgan Creek and Universal also print misleading statements on the retail packaging and
also on the physical DVD. The statement below is printed on both the retail packaging and
the physical DVD containing the Morgan Creek and Universal film "The Good Shepherd"
(2006):

"WARNING: For private use only. Federal law provides severe civil and
criminal penalties for the unauthorized reproduction, distribution or exhibition of
copyrighted motion pictures and video formats."

31. These warnings materially misrepresent federal law, to the detriment of consumers. As
stated above, numerous uses of copyrighted works that are not authorized by the copyright
holder are actively encouraged by federal law.

32. For example, Section 110(1) of the Copyright Act allows performances or displays of a work
in a classroom that are not authorized by the rights holder. Indeed, the U.S. Copyright Office
itself has ruled (through the Librarian of Congress) that "the reproduction and public
performance of short portions of motion pictures or other audiovisual works in the course of
face-to-face teaching activities of a film or media studies course would generally constitute a
noninfringing use."11Contrary to the misrepresentation described above, federal law does
not "provide severe civil and criminal penalties" for any of the uses not authorized by the
copyright holder that are described in this paragraph.

33. DreamWorks's motion pictures are widely distributed on Digital Video Discs (DVDs), which
when loaded into a DVD playing device, present the viewer with an unfair and deceptive
copyright warning.

34. The warning below is an example of the language used in DreamWorks DVDs such as
"Shrek II" (2004), which grossed $441,226,247 domestically (USA and Canada), was the
highest grossing motion picture of 2004, and, at the time of filing this complaint, ranked third
on the all-time domestic box-office receipts list:

6

"WARNING: Federal law provides severe civil and criminal penalties for the unauthorized reproduction, distribution or exhibition of copyrighted motion
picture video tapes or video discs. Criminal copyright infringement is
investigated by the FBI and may constitute a Felony with a maximum penalty of
up to five years in prison and or a $20,000.00 fine."

See Exhibit B.

35. The warning consists of a blue background with white text. These scripts are presented
visually with no accompanying audio. The viewer sees the warning immediately preceding
the feature film, following other films' previews. The viewer is unable to fast-forward past
this warning, and is thus forced to watch DreamWorks's misrepresentation.

36. Users are forced to watch a similarly deceptive warning that appears in DreamWorks's
recently released "Flushed Away" (2006):

"The contents of this video device are protected under copyright and other
intellectual property laws. This video device is licensed only for non-commercial
private viewing in homes. Any distribution outside of the licensed territory,
copying, transmission, public performance, alteration, or reverse engineering is
strictly prohibited and may result in criminal and/or civil liability. All rights
reserved."

See Exhibit C.

37. These warnings materially misrepresent federal law, to the detriment of consumers. As stated
above in paragraph 32, federal law actively encouraged numerous unauthorized uses of
copyrighted works, which will not "result in criminal and/or civil liability." The warning
stated above purports to limit viewing outside the home for example, in an academic
environment notwithstanding the fact that such a limitation cannot be imposed.12

38. These warnings, through their explicit statement of prohibition, invocation of harsh civil and
criminal penalties, and deliberate omission of consumers' rights, serve to mislead the public.

Misrepresentations in Print Media

39. The copyright warnings employed by certain print media publishers are similarly
characterized by misrepresentations of the law. For example, Harcourt, Inc.'s The Republic
of Pirates by Colin Woodward contains the following copyright warning:

7

"No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or any
information storage and retrieval system, without permission in writing from the
publisher."

See Exhibit D.

40. This warning misrepresents the fact that copying which the publisher has not authorized may
nevertheless be permitted by law.

41. Penguin Group (USA) Inc. engages in similar unfair and deceptive practices. The copyright
warning that appears in a recent Penguin publication that inherently relies on public domain
documents and fair use rights, The Lost Men: The Harrowing Saga of Shackleton's Ross Sea
Party by Kelly Tyler-Lewis, states, inter alia:

"Without limiting the rights under copyright reserved above, no part of this
publication may be reproduced, stored, or introduced into a retrieval system, or
transmitted, in any form or by any means (electronic, mechanical, photocopying,
recording or otherwise), without the prior written permission of both the copyright
owner and the above publisher of this book.

The scanning, uploading, and distribution of this book via the Internet or via any
other means without the permission of the publisher is illegal and punishable by
law. Please purchase only authorized electronic editions and do not participate in
or encourage electronic piracy of copyrightable materials. Your support of the
author's rights is appreciated."

See Exhibit E.

42. In addition to denying consumers' fair use rights, this warning implies the exercise of some
other, mysterious and unidentified right in addition to the copyrights reserved in this
statement. This implication of control over the content which is cumulative to the copyright
holders' rights has no basis in law. These warnings materially misrepresent federal law, to
the detriment of consumers.

43. By contrast, John Wiley & Son's 2007 publication of Hotel California: The True-Life
Adventures of Crosby, Stills, Nash, Young, Mitchell, Taylor, Browne, Ronstadt, Geffen, the
Eagles, and Their Many Friends by Barney Hoskyns contains the following notice:

"No part of this publication may be reproduced, stored in a retrieval system, or
transmitted in any form or by any means, electronic, mechanical, photocopying,
recording, scanning, or otherwise, except as permitted under Section 107 or 108
of the United States Copyright Act, without either the prior written permission of
the Publisher, or authorization through payment of the appropriate per-copy fee to
the Copyright Clearance Center..."

(emphasis supplied) See Exhibit F.

8

44. While this warning fails to recognize that certain parts of the publication (for example, facts such as David Crosby's birth date) may lack sufficient originality to qualify for copyright, it
attempts to recognize that certain uses unauthorized by the copyright holder are nevertheless
permitted under U.S. law. See Sections 107 ("Limitations on exclusive rights: Fair use") and
108 ("Limitations on exclusive rights: reproduction by libraries and archives").13

45. The presence of such a statement in this text not only indicates the feasibility of
acknowledging consumers' fair use rights; it highlights the absence of such recognition by
the Rights-holder Corporations named here.

46. Another stark contrast to the misrepresentations by the Rights-holder Corporations is Nimmer
on Copyright. Nimmer is one of the leading copyright treatises, edited by David Nimmer and
published by LexisNexis Matthew Bender. The Nimmer treatise, often viewed as a highly
authoritative view on copyright law, states after its copyright notice that

47. The publisher also expressly disavows any rights in government works, reminding the reader
that

"No copyright is claimed in the text of statutes, regulations, and excerpts from
court opinions quoted within this work."

48. In addition, the Nimmer text contains a "Statement on Fair Use" in which it outlines the
publisher's view on fair use. Rather than misrepresenting this view as an authoritative
construction of the law, however, the Statement recognizes the competing interests between
the public and the rights-holder:

"LexisNexis Matthew Bender recognizes the balance that must be achieved
between the operation of the fair use doctrine, whose basis is to avoid the rigid
application of the copyright statute, and the protection of the creative rights and
economic interests of authors... It is LexisNexis Matthew Bender's position that
if the "progress of science and the useful arts"[14] is promoted by granting
copyright protection to authors, such progress may well be impeded if copyright
protection is diminished in the name of fair use."

(emphasis supplied).

49. Upon conceding that this view is the publisher's position, rather than an authoritative
interpretation of the law, the Statement identifies proposed guidelines for fair use which
allow certain reproduction. Moreover, the publisher states that

9

LexisNexis Matthew Bender fully supports educational awareness programs designed to increase the public's recognition of its fair use rights."

The difference between these statements and the Rights-holder Corporations'
warnings noted above could not be clearer. Rather than misrepresenting federal law
to read as it might prefer, the publisher of this leading copyright treatise recognizes
the need to balance authors' rights with the public's fair use rights.

50. By contrast, the Rights-holder Corporations named here do not state their position on
the desirability of consumer fair use rights. They instead misrepresent to the
consumer that such rights do not exist.

51. It is immaterial that certain such phrases described herein, when considered technically, may
be construed so as not to constitute misrepresentation.15Lawyerly legerdemain cannot
excuse deception.16

COUNT 1 - DECEPTIVE TRADE PRACTICES

52. As described in paragraphs 14-51, the Rights-holder Corporations have represented to
consumers and the public that certain acts permitted and encouraged by the U.S. Copyright
Act of 1976 are prohibited, and that the exercise of these statutorily guaranteed rights will
lead to criminal and civil penalties. The statements conveyed in the misrepresentations
pertain to federal law and therefore are likely to affect consumers' conduct regarding a given
media entertainment product.

53. The statements and practices described in paragraphs 14-51 are likely to mislead consumers
acting reasonably under the circumstances, to the detriment of the consumer.

54. The statements and practices in paragraphs 14-51 are material because they concern
consumers' ability to utilize entertainment media which they have purchased or which is
transmitted via public airwaves, misrepresent the nature of federal law, and threaten criminal
and civil penalties for activities which are in fact authorized by law but not sanctioned by the
Rights-holder Corporations.

55. These misrepresentations are further material because they have caused and continue to cause
consumers to forgo legal activities and to forebear using services and purchasing and using
devices which enable activities that are in fact authorized by law but not sanctioned by the
Rights-holder Corporations.

56. The statements and practices as alleged in paragraphs 14-51 constitute deceptive acts or
practices in or affecting commerce in violation of Section 5(a) of the Federal Trade
Commission Act, 15 U.S.C. § 45(a).

10

COUNT 2 - UNFAIR TRADE PRACTICES

57. The statements and practices in paragraphs 14-51 fall well beyond the bounds of established
concepts of fairness. The misrepresentation of federal law, concurrent with the implied or
explicit threat of criminal or civil action, in a manner having the capacity to intimidate
consumers from exercising federally guaranteed rights, constitutes an oppressive, unethical
and unscrupulous practice.

58. Consumers who are intimidated into foregoing, limiting, or licensing activities already
permitted by statute and the U.S. Constitution suffer substantial injury.

59. In each instance, the misleading warning in question coincides with or is permanently affixed
to the entertainment media in question and is not reasonably avoidable by the consuming
public.

60. Because actual U.S. law represents the sound judgment of the United States Congress, no
countervailing benefit to consumers or competition could justify the statements and practices
described in paragraphs 14-51. By attempting to withdraw from the public certain rights
granted by Congress and the Constitution, the acts and practices described in paragraphs 14-51 offend public policy.

61. The statements and practices as alleged in paragraphs 14-51 constitute unfair acts or practices
in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act,
15 U.S.C. § 45(a).

63. Order the Rights-holder Corporations to cease misrepresenting the nature of the U.S.
Copyright Act of 1976, Title 17, United States Code, including but not limited to consumers'
fair use rights.

64. Order the Rights-holder Corporations to refrain from future misrepresentation of the nature
of the U.S. Copyright Act of 1976, Title 17, United States Code, including but not limited to
consumers' fair use rights.

65. Order the Rights-holder Corporations to, in a clear and conspicuous manner, engage in
corrective advertising regarding their prior misrepresentation of consumer rights, and further
advise consumers that these statements misstated the nature of consumers rights under U.S.
law.

66. Order the Rights-holder Corporations to develop a plan of action for preventing future
misrepresentations of consumer rights in copyright warnings and public advisories.

11

67. Order the Rights-holder Corporations to obtain, individually or jointly, an assessment from an objective, qualified, non-governmental third-party professional expert that:

advises the Rights-holder Corporations regarding what assertions are appropriate and
inappropriate in copyright warnings under different circumstances and in different
media that are accurate, balanced, and consistent with all provisions of the U.S.
Copyright Act and the Federal Trade Commission Act;

provides a model copyright warning for relevant forms of media that is accurate,
balanced, and consistent with all provisions of the U.S. Copyright Act and the Federal
Trade Commission Act; and

is made available to consumers and the public upon being rendered to the Rights-holder Corporations.

68. Order the Rights-holder Corporations to provide for educational awareness programs from an
objective, qualified, non-governmental third-party institution, designed to increase the
public's recognition of its fair use rights and thereby remediate misconceptions created by
the Rights-holder Corporations' prior misrepresentations.

69. Order the Rights-holder Corporations to forebear from attempting to force consumers into
waiving their rights through contractual instruments, including contracts of adhesion.

1 See, e.g., Center for Social Media, "The Good, the Bad, and the Confusing: User Generated Video Creators on
Copyright" (Apr. 2007) at www.centerforsocialmedia.org/resources/publications/the_good_bad_and_confusing/.

3Such notices were required by federal copyright law prior to January 1, 1978. For works first published on and
after the effective date of the Berne Convention Implementation Act (March 1, 1989), copyright notices are optional
but still widely used for various reasons.

5
"Super Bowl Highlights," YouTube, available at http://www.youtube.com/watch?v=a4uC2H10uIo. This clip was
posted by law professor Wendy Seltzer for educational purposes. Although this clip initially prompted two
objections by purported rights-holders to the YouTube site, the NFL subsequently concluded that copyright
students' analysis of its copyright warnings did not constitute piracy. See e.g., Peter Lattman, Wall Street Journal
Law Blog, Mar. 21, 2007, http://blogs.wsj.com/law/2007/03/21/
law-professor-wendy-seltzer-takes-on-the-nfl/; see
generally http://wendy.seltzer.org/blog/.

10
"[Just as] census data therefore do not trigger copyright because these data are not `original' in the constitutional
sense... [t]he same is true of all facts scientific, historical, biographical, and news of the day. They may not be
copyrighted and are part of the public domain available to every person." Feist v. Rural Tel. Servs., 499 U.S. 340,
347-48 (1991) (internal quotations omitted).

15Country Tweeds, Inc. v. Federal Trade Comm'n, 326 F.2d 144, 147-48 (2d Cir. 1964) ("Statements susceptible of
both a misleading and a truthful interpretation will be construed against the advertiser.").

16
"To tell less than the whole truth is a well known method of deception; and he who deceives by resorting to such
method cannot excuse the deception by relying upon the truthfulness per se of the partial truth by which it has been
accomplished." P. Lorillard Co. v. Federal Trade Comm'n, 186 F.2d 52, 58 (4th Cir. 1950).